Developer favors stable markets

Jul 06, 2008 (The Pittsburgh Tribune-Review - McClatchy-Tribune Information Services via COMTEX) -- DDR | Quote | Chart | News | PowerRating -- Communities with stable populations, including Pittsburgh, are ideal for shopping center developers during depressed times, according to the president of a Cleveland real estate company with major holdings in this region.

"We built or purchased centers in these communities, many in the North East, because our decisions were based on the population and economies of those areas," said Dan Hurwitz, president for Developers Diversified Realty Corp.

"Developers rushed to fast growth areas such as those in California, Arizona and Florida during the past few years, building shopping centers on spec, only now to find it difficult to attract retailers and have a shift in the population to shop at the centers," he told attendees last week at the Idea Exchange program at the Westin Convention Center hotel Downtown.

The annual event, sponsored by the International Council of Shopping Centers, brings together developers, commercial real estate experts and prospective retail and restaurant tenants to discuss business and expansion plans.

One thing the economic slowdown has changed for his company is the travel budget has increased because staff visit retailers instead of obtaining renewals or newcomers via telephone, he said.

Hurwitz said he will agree to three-year leases instead of five years in an effort to retain tenants.

Developers Diversified became the major owner of retail at the massive Waterfront development in 2007 when it paid $6.2 billion to acquire Inland Retail Real Estate Trust Inc. of Oak Brook, Ill.

Its other projects here include Mt. Nebo Pointe, a 387,115-square-foot shopping complex at Mt. Nebo and Camp Horne Road in Ohio Township, and Township Market Place in Monaca, Beaver County.

To date, the only tenant he has lost has been a SuperValu store in Township Market, Hurwitz said.

"But we filled its space with Circuit City and Michaels," he said.

Stating his company is centered on development as opposed to buying existing shopping centers, Hurwitz said heis considering the Pittsburgh market for prospects, but he did not identify any location or time schedule.

Hurwitz predicted capital markets could become more accessible to developers at the end of the third or fourth quarter.

"Investors who placed their money with companies holding these equities want a return on their money, and they can't get it when the managers sit on the funds," he said.

Real estate notes:

--Best of the Best winners at the 2008 Apartment Excellence awards presented by the Apartment Association of Metropolitan Pittsburgh were Phillips Associates Development Co., which won 8 awards; NDC Real Estate Management Inc., 19 awards; Senior Care Network, 10 awards; Lincoln Eastern Management Corp., 9 awards; and Amore Management Co., 13 awards.

--Upgrading of Pierce Street in Shadyside by Standard Realty Group, principal owner of most of the properties on the two-block street, will include the potential demolition of a vacant 3 1/2-story house at 5748 Pierce St., Tom Seabrooke told members of the Shadyside Action Coalition. If demolition takes place, the site will be used for 10 parking spaces to be used by tenants of Standard's properties.

--The Pittsburgh Urban Redevelopment Authority has agreed to reimburse the state Community and Economic Development department for extra costs to pay for removing a vault at the Carlyle, a 60-unit condominium development in the former Union Bank Building, Downtown. The state is providing $500,000. The E.V. Bishoff Co., which is developing the building with retail and commercial space on the first floor, expects occupancy in November or December. The $15 million project is funded privately through a Citizens Bank construction loan and a Dollar Bank line of credit.

--A free Homebuyer Education Workshop will be held Saturday from 9 a.m. to 4 p.m. by the Mon Valley Initiative at 305 East 8th Ave., Homestead. Topics include budgeting, shopping for a home loan, closing procedures and home maintenance. A light breakfast and lunch will be provided. Contact Mike Mauer at 412-464-4000, extension 4008.

--Avalon Exchange, an independent boutique specializing in gently worn clothing and contemporary fashions, will open its second area location at 680 Washington Rd., Mt. Lebanon, by late August. Plans include a new storefront with a wall of glass in the 3,000-square-foot store, said Stewart McLean, owner. The first store is in Squirrel Hill, which was relocated more than a year ago from Oakland.

Transactions:

--Centre Commons, a 75,500-square-foot medical office building at 5750 Centre Ave., Shadyside, was sold by Hub Properties Trust to SNH Medical Office Properties Trust for $15 million. John C. Popeo signed for Hub while David J. Hegarty, president, signed for SNH, according to a deed filed in Allegheny County. Both seller and buyer are at the same address in Newton, Mass.

--A three-story nursing home/hospital facility on 4.7 acres at 1 Glenshire Lane, McKeesport, has been sold by Extendicare Health Facilities Inc. (formerly Unicare Health Facilities Inc.) to Bonlar Realty Inc., 350 Bethel Rd., North Huntingdon, for $750,000. It had been owned by Glenshire Woods Inc.

Contributor: Sam Spatter

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